Sibling's bank account and financial aid

<p>Can my brother's saving account affect my efc? What if its a co-account with my parents and my brother on the account but not me? Thanks.</p>

<p>On FAFSA it would be not included in assets if it reports in your brother's SS#, but would be reported as a parent asset if it is their account & SS#</p>

<p>When my daughter opened a bank account this spring the bank insisted that my name be on it too since she is only 16. If I recall they asked for my basic info as well as hers (SSN, DL#, etc.) I wonder if that makes her account an asset of mine as well........ not that there's a mountain of money there, but it raises an interesting question. As she works and saves money for a purchase she wants to make, does it end up hurting her older borther's FA because it turns up looking like an asset of mine?</p>

<p>She has been saving for a new clarinet but needs to accumulate almost $3000. for the one she wants. She won't probably have that before the end of the year, so I wonder if it's possible that will end up looking like a couple thousand dollars <em>I</em> have in assets. Eek.</p>

<p>Maybe I'll tell her to buy the clarinet by the end of the year and I'll put however much she's short on a credit card and let her pay it off over time.</p>

<p>Anyone have experience with having a parent's name on a minor sibling's bank account?</p>

<p>As somemom said, it would depend whose SS# the bank is reporting. I have my name on all my kids accounts, and on my mothers and brothers accounts, but I'm secondary, so I don't report them.</p>

<p>We have our names on both our kid's bank accounts but they are the principal owners and interest is paid in their names. The money in the accounts is theirs. When we do FAFSA the money in his account is reported as his asset on is FAFSA and her account is reported on her FAFSA. Neither of them are reported on the others FAFSA. Also the FAFSA instructions state:</p>

<p>
[quote]
Ownership of an asset</p>

<p>Ownership of an asset may be divided or contested in several situations:</p>

<pre><code>* Part ownership of asset. If you (or your spouse) own an asset with others and therefore only own a portion or percentage of the asset, you (or your spouse) should report the net asset value that represents only your share of the asset owned. You would determine the current market value of the asset, reduce the value by any outstanding debt, and then multiply the net asset value by your ownership percentage. This result is then reported on the FAFSA.

[/quote]

</code></pre>

<p>swimcatsmom, is there any amount of money a student might have in an account that is protected in the FAFSA calculations? I mean, if a kid has a hundred bucks in the back or anything at all, is it all assessed as an asset from the first dollar?</p>

<p>If your daughter spends the money on the clarinet BEFORE you file your FAFSA, that money will not be an asset for anyone. The amounts in the accounts on the date of filing the FAFSA are considered. So ...buy the clarinet before you hit the "submit" button for your FAFSA.</p>

<p>Also, as pointed out above, it depends who receives the interest and pays taxes on it. If it's in your daughter's name and SHE is the primary holder...it would be her account. If you pay the taxes on that interest, it would be yours.</p>

<p>Currently in FAFSA students have no asset protection at all so any assets they have on the day they file FAFSA are included in the EFC formula (except where they qualify for the simplified needs test where all assets are ignored or the automatic 0 EFC).</p>

<p>Thanks, thumper1 and swimcatsmom.</p>

<p>As for who receives interest and pays taxes on my daughter's account, that would be nobody really. It's a checking account, so no interest and no taxes. But I think she must be the primary holder, in any case.</p>

<p>I'll talk to her about buying the clarinet earlier than she might otherwise have done it. We'll be filing a FAFSA for her early next year for the 2009-10 academic year at a state U. I think the priority filing deadline is mid-February '09, so she'll have to get the clarinet before that, looks like.</p>

<p>Thanks for the info!</p>

<p>IN cases like this I think it is also really important to be consistent- if that is your Ds account and later she does the FAFSA it should still be her account. The FAFSA is confusing and people make errors, I think finaid people look at consistency to see if you are a normal mistake making person or if you are trying to cheat the system.</p>

<p>So, have it be your DDs account and keep it that way</p>

<p>Good plan 'rentof2</p>

<p>Do remember that sibling accounts are included in assets for many institutional EFCs.</p>

<p>I'm not sure what you mean, cptofthehouse. Sibling accounts are included in whose assets? And by institutional EFCs are you referring to the family contribution as calculated by CSS Profile schools?</p>

<p>PROFILE wants sibling account information.</p>

<p>The only Profile question I can see that is related is, "enter the total value of parents' assets held in the names of the student's brothers and sisters who are under age 19 and not college students."</p>

<p>I wouldn't read that to mean I have to report the money in my daughter's bank account. How would the money she earns become a parent asset? (I don't mean to sound challenging, I'm just trying to understand. Money nuance is not my strong suit.)</p>

<p>I'm not sure how the sibling thing works either. Older daughter works and lives at home but won't have any part in paying for her younger sister's college.</p>

<p>I believe the only Profile "sibling" money reported is money the parents hold in siblings names...for dependent under age 19 children.</p>

<p>Like people who put money in their kid's manes are going to admit they have put money in their kids names? Kind of defeats the probably purpose of putting it in their names.</p>

<p>^ What people actually report and what they're required to report may not always be the same thing. Just keep in mind that FAFSA is a federal reporting requirement to determine eligibility for various federal grant and loan programs. As such, any intentional misreporting (such as failing to report parental assets held in children's names) is a violation of federal law, essentially an attempt to defraud the federal government. If discovered, it could disqualify you and your child from federal financial aid programs, and/or subject the party filing the false report to criminal prosecution. Just sayin'.</p>

<p>^^Thank you for enlightening me. I am actually perfectly aware of what FAFSA is and of it's reporting requirements having done several and having spent hours tracking down the value of old savings bonds that we forgot we even had to make sure we reported our assets accurately. Even though we qualify for the simplified needs test which excludes the assets we still go to great lengths each year to report them. </p>

<p>The point I was rather flippantly (and it appears unsuccessfully) trying to make was that people who put their assets in their kids names in the first place are probably doing it precisely for the purpose of reducing taxes or trying to game some system somewhere whether it be taxes or FAFSA or profile - that being the case they probably would not be likely to admit it.</p>